Long Arm Jurisdiction in Colorado
| Publication year | 1975 |
| Pages | 1715 |
| Citation | Vol. 4 No. 9 Pg. 1715 |
1975, September, Pg. 1715. Long Arm Jurisdiction in Colorado
Sooner or later every Colorado attorney has an opportunity to become involved in a situation which concerns portions of the Colorado version of the "long arm" statute, C.R.S. 1973, § 13-1-124. An imaginary telephone conversation might be as follows:
Client: This is Mr. Jones, and I'd like to know if you can help me. I am a manufacturer of widgets and a customer of mine in Atlanta, Georgia refuses to pay for items we sold him several months ago at the annual convention in Kansas City. I thought he sounded like a good prospect so I sent him $2,500 worth of widgets on open account.
Attorney: It soulds like an interesting situation. Tell me about all of your contacts or communications with this customer.
Client: Well, there aren't many, now that I think about it. I met him at a cocktail party hosted by a manufacturer during the annual convention in Kansas City. We talked awhile and I called him when I got back to Colorado. Later I sent him the goods on open account. I know his business is good and I know the products were not defective. All he says is that I'll have to sue in order to collect my money.
Attorney: Were there any other contacts?
Client: Well, there were letters from me requesting that he pay---some telephone calls to him, that I made personally. Why, I even went so far to satisfy him that when I saw him coincidentally in a lift line at Vail last winter, I agreed to substitute metal rather than plastic hinges at no extra cost. Even after he received the substituted goods he refused to pay. By the way, if you can help me on this deal, you might be able to act as our corporate counsel. Our national sales are up to $17,000,000 and my wife thinks we ought to see a lawyer. Maybe I should get a will also. Anyway, I'll call you later this week. If you think we have a chance, I will come in and we can talk. The one thing I do not want to do is waste further time and money on this account. I would like some good advice.
The above scenario has its variations; the net effect is the necessity for a detailed inquiry into the substance and machinations of C.R.S. 1973, § 13-1-124 referred to as the Colorado "long arm" jurisdiction or the "single act" statute. The purpose of
this statute is allegedly to create alternative and independent bases for the extension of in personam jurisdiction over persons who commit certain "acts" within Colorado.
A court's jurisdiction as a concept within the law is one of the more esoteric areas of jurisprudence. However complex and mystifying it may appear at times, one factor unifies the entire area. The primary basis for jurisdiction is the de facto physical power of the court over the particular person or thing which is the subject of the law suit.(fn1) As the mobility of Americans has increased, jurisdiction over out-of-state residents who have committed wrongs has become more and more critical. Colorado lawyers who live in a state considered a mecca for countless tourists and developing businesses must be firmly acquainted with this state's powers to assert jurisdiction over out-of-state persons.
The landmark case from which modern developments are traced is International Shoe v. Washington.(fn2) In determining whether the state of Washington had in personam jurisdiction over a foreign corporation, the United States Supreme Court stated the still existent standard: "Due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice..."
In Hanson v. Denckla,(fn3) the United States Supreme Court also said: "The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Subsequent cases have further clarified those precepts of "fair play and substantial justice" and provide the basis for every state's long arm statutes.(fn4)
In 1965 the Colorado legislature passed its version of the long arm statute. In' pertinent part the statute provides:
13-1-124 Jurisdiction of courts. (1) Engaging in any act enumerated in this section by any person, whether or not a resident of the state of Colorado, either in person or by an agent, submits such person, and, if a natural person his personal representative to the jurisdiction of the courts of this state concerning any cause of action arising from:
(a) The transaction of any business within this state;
(b) The commission of a tortious act within this state;
(c) The ownership, use, or possession of any real property situated in this state; or
(d) Contracting to insure any person, property, or risk residing or located within this state at the time of contracting.
In General. Subsection (a) has required the greatest effort by Colorado courts in clarifying the standards of "fair play and substantial justice." Each case decided by a Colorado court has been a separate federal or state analysis of the factors and "contacts" that connect the parties to Colorado. However, it must be borne in mind that whatever the facts, the long arm statute is not intended to be substantive; the statute is a procedural device intended by the Colorado legislature to extend the jurisdiction of Colorado courts to the full limits permitted by due process.(fn5) Its purpose is to act as a procedural device to broaden the forum within which redress for grievances may be proper.(fn6) The party who seeks to utilize this extended jurisdiction
must sufficiently allege facts within the complaint that satisfy the burden imposed.(fn7) Usually this can be done by a prima facie showing within the complaint.(fn8) If this is not accomplished at this point, both parties can file affidavits in connection with the usual motion to quash summons which will further educate the court regarding the Colorado contacts.(fn9) Care should be exercised by defendant's counsel in his response to the invocation of long arm jurisdiction. Although it has not been clearly stated by any Colorado court, it appears that in a limited sense, the parties can by filing permissive claims confer upon the Colorado court jurisdiction which it would not otherwise possess.(fn10) It does not matter that the transaction of business occurred prior to the effective date of the statute, as it is a matter of procedure rather than substance.(fn11)
Standards. In order to appreciate the methodology and the important contacts utilized by Colorado courts, several characteristic cases relying on "transaction of any business" will be examined.
In Knight v. District Court,(fn12) the North Valley State Bank brought a standard action in spite of a cognovit provision against plaintiff Knight on a promissory note. It appears that in June of 1964 plaintiffs came to Colorado and successfully negotiated a loan from the aforementioned bank. Plaintiffs returned to their residence in Utah and made payments to the bank at their offices in Adams County. Later, the original note was renewed by plaintiffs in Utah. After default on the note, summons was served personally on plaintiffs in Utah.
In examining the above facts, the Colorado Supreme Court held that the bank's cause of action "arose from" the original note which clearly had been the result of transacting business within Colorado. The court avoided the negotiable instruments problem of extinguishment and renewal and decided the case on the issue of "purposeful acts." Justice McWilliams approved the concept that it is not necessary to have committed the "last act" in Colorado in order to confer jurisdiction upon Colorado's courts. The court stated:
... even though the "last act" such as the signing of a contract, for example, may have occurred outside the geographical confines of the forum state, nevertheless the statutory test of a claim arising out of...
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